DDP from China: who pays the duty and VAT, and who customs can chase

A supplier sends a quote marked DDP to your door. No duty bill, no import VAT, no customs agent to chase. It looks like the easy answer.

DDP answers one question: who pays. It does not answer a second question: who customs can chase if something goes wrong. The two answers can be different people, and the second one decides whether you can reclaim your VAT and whether a customs debt can land on your desk.

This guide covers both questions for UK and EU buyers. It sits next to our guides on Incoterms, UK import duty and VAT and importing from China to the EU.

What DDP means

DDP is one of the eleven Incoterms 2020 rules, published by the International Chamber of Commerce. The seller delivers the goods to the named place in your country, clears them for import and pays the duty and taxes. The ICC says that under DDP the seller is “ultimately responsible for the import clearance process and any associated challenges.”

The ICC also says that where import rules require a local importer to clear the goods, “DDP cannot be used, and DAP would be the appropriate Incoterms® rule.” Under DAP the seller delivers to your door, and you clear customs and pay the duty and VAT.

An Incoterm is a term in the contract between you and the seller. Customs authorities are not party to that contract. That is why the second question matters.

The question customs asks

Customs does not ask who agreed to pay. It asks who made the declaration, and in whose name. In the UK the law calls the debt a customs debt. It arises when goods are imported, and the person named on the entry can owe it.

HMRC’s guidance on customs debt liability (last updated 13 August 2026) sets out the rule:

• Direct representation. The agent acts in your name. You, the principal, are solely liable for the customs debt. The agent can become jointly liable only if you gave clear instructions and the agent made a deliberate or unreasonable error.
• Indirect representation. The agent acts in its own name on your behalf. The agent and you are both “jointly and severally liable”. HMRC may seek payment from either of you.

The EU rule is similar. Under Article 77(3) of the Union Customs Code, the declarant is the debtor. With indirect representation, the person on whose behalf the declaration is made is also a debtor. Under Article 84, where there are several debtors they are jointly and severally liable.

HMRC adds a point that matters for buyers. If you appoint someone to deal with customs, you are still responsible for due diligence on your customs declarations, and whoever acts for you needs your written instructions that show whether they act directly or indirectly.

The practical result: if your supplier’s forwarder clears the goods under DDP and puts you on the declaration, a wrong commodity code or a low declared value can come back to you, even though the supplier agreed to pay.

Who can reclaim the import VAT

Import VAT is a second issue, and it is where DDP often costs a VAT-registered buyer money.

HMRC’s guidance on VAT on imports says:

• You can reclaim the VAT on imported goods that you own, as input tax, under the normal rules.
• A shipping or forwarding agent generally cannot reclaim it. An agent acting as a principal can.
• To claim, you need the import VAT statement as evidence. VAT-registered businesses can account for import VAT on their VAT Return using postponed VAT accounting.
• A UK trader who is not registered for VAT still has to pay the import VAT and cannot reclaim it.

So the name on the import entry matters. If you are the importer, the evidence is in your name and you account for the VAT on your own return. If the seller or its forwarder is the importer, the evidence is theirs, not yours.

In the EU, each member state applies the VAT Directive in its own law. In Case C-714/20 the Court of Justice held that an indirect customs representative is not liable for import VAT under Article 77(3) alone. The representative is liable for the customs duties on the goods it declared. Liability for import VAT needs a clear basis in national law. Ask your customs broker how your member state treats it.

Four ways a DDP shipment can be cleared

The last row is the usual one on a cheap “DDP” quote from a factory or trading company. The seller needs the right registrations in your country. In the UK that is a GB EORI number and, to charge you UK VAT, a UK VAT registration. In the EU it is an EORI number and often a VAT registration in the country of import. A supplier that has neither cannot make a true DDP delivery. Someone else clears the goods for it, and that someone should be named.

Why DDP quotes look cheap

A DDP price has to cover freight, duty, VAT, the clearance fee and the provider’s margin. When it comes in low, ask where the saving came from. Three causes are common:

• A low declared value. Duty and VAT are worked out on the declared customs value, so a value below the price you paid cuts the bill. Customs can recalculate the duty later. Our UK duty and VAT guide explains why undervaluation is fraud, and the customs debt can reach whoever is named on the entry.
• A wrong commodity code. A code with a lower duty rate has the same effect.
• VAT left out. Some quotes say DDP but exclude VAT. Ask whether the price includes import VAT or whether VAT comes on top.

Duty is worked out on the customs value, which includes freight and insurance to the border, whatever Incoterm you bought on. Our Incoterms guide covers that point.

Worked example

You order 1,000 units at £3.30 FOB. Freight and insurance come to £420. The duty rate is 4% and UK import VAT is 20%.

If you are VAT-registered and the importer, you account for the £773.76 on your VAT Return and reclaim it on the same return. It is not a cost.

A supplier then offers £4.40 per unit DDP, or £4,400. The gap to your own landed cost of £3,868.80 is £531.20. Ask what that pays for: a clearance fee, a margin, or a lower declared value. Then ask whether the £4,400 includes UK VAT, and whether you receive a VAT invoice showing it. If the VAT sits inside the price with no invoice you can use, you cannot reclaim it, and the real comparison is £4,400 against £3,868.80.

Six questions to ask before you accept DDP

When DDP is the right choice

DDP works in some cases:

• Parcels to consumers. Your customer should not get a bill at the door.
• A small first order. The extra cost of one DDP shipment can be less than the time to set up customs.
• No customs set-up yet. If you have no EORI number and no VAT registration, a DDP provider can clear for you. Check who is the importer and what you cannot reclaim.

For stock you buy regularly and sell as a VAT-registered business, importing in your own name is usually clearer. You hold the VAT evidence, you check each declaration and you can compare forwarders on price. The standard route is FOB with a named port and your own forwarder. We cover it in how to source products from China.

How CFS helps

We quote factory prices on FOB terms and arrange shipping through our group business, ParcelFromChina. Our shipping and consolidation service works with a customs broker at destination, so you can see who the importer is before the goods ship. If you have a DDP quote and want a second opinion on the paperwork, send it to us.

Bottom line

DDP tells you who pays. The customs declaration tells you who is liable. Before you accept a DDP quote, get the importer’s name, the EORI number, the type of representation and the VAT invoice in writing. If the supplier cannot give them, import in your own name.

Checked against GOV.UK, EUR-Lex and the ICC Academy on 13 November 2026. This guide is general information, not legal or tax advice. Ask a customs broker or accountant about your own import.